Cava Faulkner

If you’re relying on your top line to grow your wealth, you could be missing out on easy opportunities to save money and improve profits, independent of your revenue.

Many entrepreneurs waste precious time and money by falling prey to these common mistakes. However, there is no need to sacrifice, work harder, or take on new financial risks when they can be easily avoided.

Discrepancies in your credit score can cost you thousands in interest rates and premiums. Monitor your credit report every six months for accuracy.

Differentiate between wasteful consumption expenses and rainmaking expenses that can pay big returns—you can’t afford to scrimp on those.

Commissioned advisors want to keep your assets under their control. Stay conscious of this bias. And, consider having us, as your objective trusted advisor who is not paid a commission, review all investments before you make them.

During tax season, your accountant’s focus is on filing returns, not strategizing. Meet off-season at least once to prepare a proactive—not reactive—tax strategy. And always get projections before the end of the year so you can strategize end of year tax decisions

Review your business structure with an attorney every three years to ensure your structure is still advantageous.

Refinancing or restructuring your loans could save interest and potentially even taxes. Pay off your least efficient loan first, and you could qualify for lower interest rates on the rest.

Invest in what you know. You—not a commissioned advisor—know what’s best for your business. And that requires you to be tracking your financials at least monthly, and likely weekly, to be making wise choices consistently.

Profit sharing with employees solely for tax purposes is like giving the IRS control of your money. Don’t spend money to save money. But, do invest money to create more of what you want. So, consider profit sharing to motivate long-term growth and legacy of your business.

Your contributions are tax-deferred, but you have to pay those taxes at some point. Because taxes are expected to go up, you’ll end up paying more to the IRS

Losing the passion, you have for your business means lost productivity—easy to do when you’re bogged down with daily details and decisions. Take the time to be proactive about your legal, insurance, financial, and tax planning so you can fuel the passion that brought you to this business in the first place.

If you’re ready to be proactive about the financial success of your business, begin by sitting down with us. We are here to help you implement legal, insurance, financial, and tax systems that will free up your time and money, so you can focus on what matters.

We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, insurance, financial, and tax systems you need for your business. Call us today to schedule. Or, schedule online.

Within less than 10 years, cryptocurrency has evolved from a shadowy world ruled by high-risk speculation and dark-web devotees to one of the hottest trends in both investment and business. And the technology behind digital currency, known as blockchain, is itself experiencing booming popularity.

Indeed, blockchain is heralded by some as the most significant technological advancement since the launch of the internet. Outside of its use as a decentralized currency, blockchain tech is already gaining ground in a diverse array of industries, including supply-chain management, digital IDs, voting, real estate, journalism, and many others.

Whether or not any of those blockchain applications achieve mainstream success, one thing is certain—cryptocurrencies like Bitcoin have revolutionized business payment processing. What’s more, the applications that allow businesses to accept cryptocurrency have advanced to the point where it’s now just as easy—if not easier—to accept cryptocurrency as it is to accept credit cards.

Here we’ve outlined some of the biggest benefits businesses can achieve by adding crypto as a payment option. Given how fast and far digital currency has advanced, all business owners should give this new technology serious consideration.

When businesses process credit card payments, the transaction not only involves the merchant and credit card company, but multiple other intermediaries, all of which charge some type of fee. Given this, typical credit card processing fees for businesses average 3%, but can run as high as 5%.

With cryptocurrency, however, the payment is routed directly from the sender to the receiver, eliminating all middlemen and dramatically lowering fees. Indeed, cryptocurrency fees generally run between zero and 1%, so by offering it as a payment option you can save significant money on each sale.

Whether made at the point of sale (POS) or online, credit card payments are a goldmine for frauds and hackers. These criminals steal customer’s personal information and use it for all kinds of nefarious purposes. And since they often lack the security resources of larger companies, small businesses are one of their favorite targets.

When making cryptocurrency payments, customers aren’t required to share any personal data—the payments are totally anonymous—so there isn’t any identifying data for hackers to steal. What’s more, some people greatly value their privacy, so they use cryptocurrency over other payment options simply because there’s no way to identify the purchaser.

In fact, a recent study of online shopping by Statista found that 17% of consumers decided not to make on online purchase due to security concerns, and another 18% failed to make a purchase because the company required too much personal data in its security check.

As when paying with cash, crypto transactions are final and cannot be contested by a customer. So with cryptocurrency, customers can’t claim they didn’t authorize the payment or are unhappy with your product or service, which can eliminate a significant risk of doing business when customers buy something from you and then dispute the payment with their credit card company.

What’s more, the blockchain technology verifies that funds are available before the transaction is complete, making it nearly impossible for customers to make a purchase without the funds in their account to cover it. And unlike most credit card processing services, there are no holdbacks. When someone pays with cryptocurrency, you receive all of the funds right away.

The internet allows companies to do business with anyone in the world who has a web connection, so even the smallest business can now sell their goods and services—or purchase their supplies and equipment—internationally.

Because cryptocurrency is completely decentralized with no government regulating it, business owners can avoid the hassles and expense that come with foreign currency transaction fees and exchange rates. Rather than going through the headache of accepting dozens of different foreign currencies, businesses now have a single form of currency that is welcome no matter where you live.

Outside of new foreign customers, businesses can also attract consumers who are die-hard fans of cryptocurrency. Indeed, there are a growing number of people, who specifically seek out businesses that accept digital currencies, and you can break into this expanding customer base.

By adding this new payment option, you can also gain a serious advantage over your competitors that don’t accept crypto—and force them to play catch-up with you down the road. And with more and more brands, financial firms, and institutions accepting digital currency every day, it’s only a matter of time before this payment option will be the rule, rather than the exception.

Whether incorporated into your POS systems in a brick-and mortar storefront or added to your website’s e-store, getting your business set up to start accepting cryptocurrency is now quite simple and inexpensive.

In the past, you had to be an IT genius to understand and implement the new technology, but these days, even your neighborhood lemonade stand can start accepting digital currency simply by adding one of many apps available for smartphones.

In a coming article, we’ll spotlight some of the most popular methods small businesses can use to accept crypto payments, but until then, a simple Google search for “cryptocurrency payment applications” will give you a headstart in seeing what’s out there.

Like any new development involving a business’ finances and income, cryptocurrency comes with several legal, tax, and security issues. So if you’re serious about adding digital currency as a payment option, first consult with us as your Creative Business Lawyer® to ensure you have all of your bases covered—and can achieve these benefits without any unnecessary risk.

We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule. Or, schedule online.

In the first part of this series, we discussed the dangers of reverse mortgages for senior homeowners. Here, we’ll look at how these complex loans can negatively impact your family and estate plan.

For decades, reverse mortgages have been touted as an easy way for seniors to access extra money during retirement. Indeed, there was a time not too long ago when it was nearly impossible to watch TV without seeing at least one commercial extolling the benefits of these unique mortgages.

Yet, reverse mortgages turned out to be a financial disaster for many senior homeowners and their families. Tens of thousands of retirees lost their homes to foreclosure after defaulting on what was promised to be a “risk-free” way to convert the equity in their homes into cash.

Moreover, reverse mortgages were aggressively marketed mainly to low-income homeowners, who possessed minimal financial assets outside of the equity in their homes—the very people most likely to default. And though the federal government has recently enacted new laws to better protect seniors, reverse mortgages are still being hyped as a safe way for retirees to obtain much-needed cash.

Last week, we talked about how reverse mortgages work and discussed the devastating effects they can have on senior homeowners and their spouses when things go wrong. Here, we’ll cover the potential risks reverse mortgages pose for your family and estate plan.

When it comes to reverse mortgages, you must not only consider the negative effects such loans might have on you while you are living, but also how they could affect your estate and family when you die. Like any loan, a reverse mortgage is a debt that decreases the value of your estate. But unlike most loans, the balance of a reverse mortgage increases with time, rather than decreases.

With a traditional mortgage, you accrue equity and lower the balance of the loan with each payment you make. Upon your death, your estate receives the net equity from your home, minus the balance, if any, remaining on your mortgage. So in most cases, the longer you hold a traditional mortgage (and the more payments you make), the more value your home will add to your estate.

But with a reverse mortgage, it’s the exact opposite.

With a reverse mortgage, you’re taking out a loan against the equity you already have in your home. Since you’re receiving payments from the lender, rather than making them, the equity you have in your home decreases over time, while your loan balance increases. Thus, the longer you hold a reverse mortgage, the less value your home is likely to add to your estate.

If you take out a reverse mortgage, you can still leave your home to your family in your estate plan. However, you’ll not only leave your loved ones a less valuable asset, but they’ll also have to pay off the balance of the loan after you die, otherwise the lender will foreclose.

Whomever you select to inherit your home will typically get six months to pay off the reverse mortgage. And they should move as quickly as possible because until the loan is settled, interest on the balance and monthly insurance premiums will continue to eat into any remaining equity.

Unless your family has enough money on hand to fully pay off the reverse mortgage upon your death, they’ll probably end up having to sell the home. If so, the proceeds from the sale can be used to pay off the loan (including all fees and interest), and your family keeps any remaining equity. And this is the best-case scenario.

While reverse mortgages are designed to stay within the equity value of your home, this only works as long as home values are rising. If home values crash, like they did during the recession, the balance of your reverse mortgage could end up exceeding the market value of your home.

The good news is reverse mortgages are “non-recourse” loans insured through the Federal Housing Administration (FHA). This means your family won’t ever owe more than the home’s appraised value, and lenders can’t come after your family or estate to recoup their loss. If your reverse mortgage balance exceeds your home’s value at the time of your death, your family is only responsible for paying the lender 95% of the home’s appraised value.

For example, let’s say your home is appraised for $100,000, but the reverse mortgage balance is $200,000. To keep the home, your family would need to pay $95,000—95% of the $100,000 market value. Federal mortgage insurance covers the remaining amount.

Lenders, however, still make back their money. If your home’s sale doesn’t meet the lender’s expenses, an FHA fund insuring the loan pays the difference. Not surprisingly, this fund is currently more than $13.6 billion in the red, which reflects just how risky reverse mortgages can be.

So in this scenario, your family would have to go through all of the hassle of selling the home and end up with nothing to show for it. In such a case, your home would be more of a burden than a benefit to whomever ends up inheriting it, which is the exact opposite of how your estate plan is supposed to work.

Given this, unless there’s equity in the home, your family would have little incentive to sell the property and may want to simply hand it over to the lender to avoid the time and expense of foreclosure. Known as “deed in lieu of foreclosure,” your loved ones can do this by signing the home’s deed over to the lender.

Obviously, the best course of action is to never take out a reverse mortgage in the first place, but if you already have a reverse mortgage on your home, it’s absolutely critical that your family knows about it. This is something that you must not hide from your loved ones. If you have a reverse mortgage, talk to your family now to discuss the available options.

Telling your family that you’ve taken out a reverse mortgage may be embarrassing, but if your family is unaware of the loan and you die or need to move into a nursing home, they’re in for a potentially awful surprise. Indeed, your adult children may be counting on your home’s equity to help cover the costs of your long-term care and/or funeral expenses, so they’ll need to know as soon as possible to make other arrangements.

And once you’ve spoken to your loved ones, mitigate any potential fallout through proactive planning strategies.

The vast majority of seniors should simply avoid reverse mortgages all together. If you’re in desperate need of extra money during retirement, there are numerous safer options to consider.

And before you make any major life decision, especially one involving the family home, discuss the potential impact on your loved ones’ future. You never know when one seemingly minor choice might end up causing all kinds of trouble for your family down the road.

We offer a complete spectrum of legal services for business owners and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer you a LIFT Your Life And Business Planning Session, which includes a review of all the legal, insurance, financial, and tax systems you need for your business. Schedule online today.

Want to know a proven way to live a more fulfilling life?

All you have to do is fully accept the fact that one day you’re going to die.

“I am of the nature to die. There is no way to escape death.” –Upajjhatthana Sutta

The unavoidable nature of death is a basic tenet found in every religion. Indeed, the acceptance of death is so important in Buddhism that “impermanence,” or the fact that everything born eventually dies, is at the top of the Buddha’s list of the three universal characteristics of existence.

Before religious practice, Tibetan Buddhists chant, “The whole world and its inhabitants are impermanent. The life of human beings is like a bubble. Death comes without warning; this body too will be a corpse.”

Such teachings may seem morbid, but they’re actually designed to awaken you from denial and inspire you to fully appreciate life because you never know when it will end.

Numerous individuals have discovered that contemplating and accepting their own mortality is a powerful source of happiness. It may seem counterintuitive, but this isn’t something only found in religious teachings; it’s also been demonstrated by modern science.

Countless healthcare professionals report that people facing terminal illness often experience an incredible sense of peace and fulfillment in the days and weeks before they die. Many of them describe the acceptance of death as a life-changing event, confessing they never knew what it meant to live until they knew they were going to die.

The same is true for many who undergo a near-death experience (NDE). After staring death in the face, they report that their lives have much greater meaning. They frequently make dramatic life changes because they know without a doubt that any day, even today, might be their last.

You’ve undoubtedly heard the key to happiness is to be fully present in each and every moment. This advice is also derived from acceptance of death. By accepting that death is inevitable, we’re inspired to embrace every second of our lives with more gratitude and joy because we know that our existence is so fleeting.

If you’ve been avoiding thinking about and preparing for death, you may be missing out on an incredible opportunity. What all of these experiences show us is that death is an essential part of what makes life so sweet.

One of the biggest steps in accepting death is to prepare for it with proper estate planning. And proper estate planning is needed, regardless of how big or small you think your estate is, because no matter what, your family is going to have to handle whatever you have when you’re gone.

Indeed, facing life’s greatest fear head-on and using it as an opportunity to protect and provide for your family is one of the greatest gifts you can give yourself and those you love.

If you’re ready to begin truly living your life, start by working with us to properly plan for the inevitability of death. Contact us today to get started by scheduling a Family Wealth Planning Session.

We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session, ™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge. Schedule online today.